In a recent blog post (Strategic Planning in Banking: What a Joke), Ron Shevlin noted the following:
“Q. What do a lot of banks and (especially) credit unions do every year at strategic planning time?
“A. They go through the charade of defining a “strategy” for the next 12-24 months, often based on some overly simplistic and misguided SWOT analysis.
“The end result of this “strategic planning” effort is a list of initiatives that are supposed to produce strategic value, direction, and competitive advantage.
“WHAT A WASTE OF TIME AND EFFORT”
As usual, Ron is absolutely spot-on. As I’ve said previously, it’s time you throw out the SWOT. But getting back to Ron’s post, why is much of what financial institutions do in strategic planning a waste of time?
Because too many of those so-called strategic plans fail to have the proper planning horizon. The planning horizon refers to how far out you are developing strategies and solutions. Here’s a hint: it’s more than a 12-month list of tactical steps.
Visionary CEOs and executives think long-term. Many years—like three to five.
Of course, the push back I get is that too much can change in that timespan and that the financial services industry is moving too quickly to make any plans longer than about twelve months.
